Beam is open-source cryptocurrency running on the Mimblewimble blockchain. The Beam development team seeks to create a new privacy-enhanced alternative to the original Bitcoin blockchain with a user-friendly approach and a startup mindset. Beam was the first cryptocurrency under the Mimblewimble protocol and later followed by the Grin coin.
Beam is set up on an additional technology known as Dandelion. The technology has its focus on obscuring network traffic activity through randomizing the pathways used by transactions to get dispersed on a blockchain as a way of enhancing privacy. In the upcoming developments, Beam team will set up an optional feature of transparency. This feature will enable users to decide for themselves which information will be available and to which parties.
How Does The Mimblewimble Blockchain Work?
The idea of Mimblewimble blockchain first appeared in 2016. This protocol seeks to offer an alternative way of constructing payments with the end goal of having enhanced privacy and efficiency. In short, the network wants to make payments confidential and untraceable. The protocol is a combination of Confidential Transactions (CTs) and Pedersen Commitments. Furthermore, it is important to note that CTs are complex, unlike other cryptographic payments.
The complexity arises from the needed proofs for every transaction. However, Mimblewimble seeks to eliminate the complexities associated with CTs by removing the scripting behavior. This method can compromise security and privacy and Mimblewimble solves this challenge by combining the blinding factors and dummy outputs to have an enhanced security and privacy level of the CT. Furthermore, the protocol uses a transaction aggregation method that ensures less data on transaction history is stored on the blockchain. The reduced history data contains block headers, system state, and the output signatures of the ‘dummy outputs.’ However, additional testing is still underway to ensure the validity of this technology.
The Beam protocol is coded in C++. Beam sees itself as a confidential store of value coin with a fixed issuance schedule akin to bitcoin. Additionally, Beam permits non-interactive offline transactions through the secure BBS system. The Beam development team is working on various upgrades of the protocol. In the coming upgrades, the team will set up atomic swaps with Bitcoin, hardware wallet, mobile wallet, lightening network PoC and BTCPay Server integration. The protocol is set to have a clear cathode, a mining algorithm hard fork, mobile wallet, web wallet with multisig support.
BEAM’s Outstanding Features
The Mimblewimble protocol alongside the Beam cryptocurrency is attracting attention due to its unique features. Here are some of the outstanding aspects of Beam.
1. Auditable Wallet
BEAM has an auditable wallet. This feature targets the regulation aspect of businesses. Beam is working on a wallet for businesses that meet laid down regulations in different jurisdictions. The wallet will generate extra public and private keys meant for auditing. The public keys are then availed to authorities for auditing since all transactions are tagged, hence promoting transparency in payments.
2. Compact Blockchain
The Beam project keeps the blockchain compact. According to Beam, the project has a model that reuses transaction kernels to authenticate subsequent payments. Kernels for each Mimblewimble transaction remains in the system because all intermediary transaction commitments do not exist. With the Beam model, the remaining kernels are consumed without altering the transaction irreversibility principle. Beam deploys the use of a multiplier for old kernels, by the same user who has visibility of the old kernel, for the new transaction. All these transactions are subject to a fee refund set up by Beam.
3. Bulletin Board System (BBS)
Normally, when setting up authentic payments on the Mimblewimble blockchain, all participants collaborate and select binding factors that balance. The process entails different steps and communication is key in realizing the payments. To facilitate this process, Beam has a Bulletin Board System (BBS). This system operates on Beam full-nodes for asynchronous negotiation of payments and it uses the numerous Merkle tree structures for tracking different aspects of the blockchain. It uses a Radix-Hash tree structure for some of their trees which are a modified Merkle tree that is also a binary search tree. This offers different features that the standard Merkle trees does not have which they exploit in the implementation stage.
4. Business Auditability Feature
As a way of catering for businesses, Beam separated the platform’s development into two avenues: Beam Core and Beam Compliance. Beam Core deals with technical innovation of the network’s design while Beam Compliance is for the opt-in compliance and auditability aspects of the network. Beam Compliance serves directly to businesses looking for auditability from regulators while at the same time retaining privacy.
Governance of BEAM
Beam’s approach to governance is similar to a startup just like Zcash. The protocol has developers and contributors who work in a normal company setting. The Beam Foundation currently oversees the project where core developers are members. Furthermore, Beam continues to put the focus on usability especially on the side of businesses and they need to show financial trails of transactions for auditors when called upon.
With a focus on usability, Beam has used significant resources in setting up a GUI wallet and mobile wallet. The two wallets will propel Beam’s mass adoption in return growing the number of transactions. With increased transactions, we will have better privacy on the Mimblewimble blockchain. The Beam wallet is available on MacOS, Windows, and Linux operating system while the development team is working on a light version.
As seen earlier, Beam is an open source protocol with contributors playing a big role in coming up with the code. Additionally, from the onset of the project, Beam developers had no plans of rolling out an ICO as a way of funding. Initially, Beam attracted investors for the first funding and sustainability. The investors placed 20% of every mining block incentives into a treasury for funding future development and promotion of Beam.
Beam’s Monetary Policy
Beam’s monetary policy uses a deflationary model that comes with a timely halving of the mining reward and maximum supply of Beam of 210 million. The first year has a block reward of 80 Beam coins for every block for each year. Consequently, the reward is set to halve after four years until the 133rd year. Notably, Beam has not issued a specific mining reward structure. Beam also puts an emphasis on the private store of value, unlike other cryptocurrencies that focus on peer to peer digital cash. Beam rewards are on a monthly basis to investors, advisors, and developers.
Proof of Work
The BEAM project uses the Equihash Proof of Work as its mining algorithm. Initially, Equihash was a memory-hard PoW algorithm. It depended on memory-usage to achieve Application Specific Integrated Circuit (ASIC) resistance. The goal was to have an efficient algorithm to operate GPUs in place of ASIC miners. Beam’s development team will hard fork the protocol several times to adjust the mining algorithm to allow for ASIC mining. On the other hand, the Beam team believes ASIC technology will be more affordable within two years, allowing miners to enjoy the same benefits of large-scale mining firms.
Beam alongside Grin are the first two full Mimblewimble implementations with a unique focus on privacy and efficiency. Going into the future, Beam will roll out revolutionary upgrades that will enhance privacy, usability, and scalability. Above all, Beam is still a young project but it will be interesting to keep an eye on this protocol to see how its various decisions play out both technically and governance model.
For the project to achieve mass adoption, developers must also address some of the underlying concerns from crypto lovers. We have concerns alluding that the Beam project may potentially be vulnerable to machine-learning analysis. This concern arises from the project’s design that failed to conceal inputs and outputs. At the moment, the Dandelion feature attempts to hide some of the leaks but the development team needs to conduct experiments to come up with a solid way forward.
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